BLOCKCHAIN FOR
GLOBAL
DEVELOPMENT
JOSEPH LUBIN, MALLY ANDERSON, AND BOBBI THOMASON
In the last year, global interest in blockchain technologies and their possible
impact has permeated the public consciousness. Although much of this early
attention has focused on the financial applications, many are eager to speculate
about the ways blockchain will transform societies, institutions, and the very
world as we know it. Many of these predictions inspire and galvanize observers
and participants alike. However, these tools are very new and still developing,
therefore few are addressing the potential and possibilities of blockchain tech-
nologies in the near future.
So what can we do with blockchain
technology right now? Most of the
builders of the Ethereum blockchain
ecosystem at ConsenSys share a vision of
a decentralized future that creates oppor-
tunity and abundance for all people.
Ethereum has the unique potential, and
some may believe even an obligation, to
create a more accessible, equitable, and
inclusive ecosystem from the outset by
investing in social impact initiatives now.
The developing world stands to benefit
most dramatically from creative applica-
tions of decentralizing
tools and
economies. This essay explores possible
ways Ethereum-facilitated technologies
can shape global development. We focus
on three core applications of blockchain-
enabled solutions: peer-to-peer smart
contracts, self-sovereign identity, and
consumer utility tokens.
The Ethereum blockchain is a public,
open-source, distributed computing plat-
form that supports the development and
utilization of decentralized applications.
Whereas the Bitcoin blockchain was
designed primarily as a payment system,
Ethereum allows for more diverse capa-
bilities, including its associated cryptofuel
(similar to a currency), Ether, as well as
smart contracts (see below). “Smart con-
tracts” are not actually smart, nor are they
necessarily contracts in a legal sense. They
are just executable program objects on
certain blockchains that support them,
like Ethereum. A blockchain is a distrib-
uted ledger that enables tamper-proof,
secure recording of transactions, collected
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into “blocks” of data, between partici-
pants on a decentralized, peer-to-peer
network. Transactions and blocks are val-
idated by the parties involved and do not
require a centralized authority to attest to
the data or approve the value transfer,
which can reduce cost and frictional
delays in every interaction.
In the context of the Ethereum
blockchain, decentralization is both a
goal and a process, as well as an architec-
ture. The word “decentralization” refers
broadly to the dispersal of component
network nodes, data, computational
activities, and developers across an open-
source, peer-to-peer network; block-
chains are not controlled by any central
infrastructure, and no one party controls
the data or the network. In fact, it is near-
ly impossible for a minority set of actors
on the network to improperly manipulate
the data or the programs on a decentral-
like Ethereum. These
ized platform
twinned capabilities—automation and
adaptability, security and configurable
transparency, peer-to-peer openness and
greater individual control—all arguably
make Ethereum the first technology that
could facilitate widespread decentraliza-
tion, and thereby help us to address sys-
temic imbalances and bring about a more
equitable distribution of information and
resources. Proponents of blockchain
technology aspire to enable distributed
cooperation between strangers on a glob-
al scale by way of mechanisms that auto-
mate trust; the question is, how might
that become a reality?
SOCIAL CONSTRUCTION OF
BLOCKCHAIN TECHNOLOGY
As with all new technologies, blockchain
is not a panacea, nor should it be imple-
mented without careful consideration of
the context and an evaluation of previous
interventions within that context. We
examine Ethereum’s possible impact
from the perspective of the social con-
struction of technology, drawing from
the work of sociologists and organiza-
tional theorists. When we discuss the
social construction of technology, we
refer to an iterative social process in
which individuals and collectives use a
technology, observe its intended and
ABOUT THE AUTHORS
Joseph Lubin is a Co-founder of the blockchain computing platform Ethereum and the Founder
of Consensus Systems (ConsenSys), a blockchain venture studio. ConsenSys is one of the
largest and fastest-growing companies in the blockchain technology space, building develop-
er tools, decentralized applications, and solutions for enterprises and governments that har-
ness the power of Ethereum. Lubin graduated from Princeton University with a degree in elec-
trical engineering and computer science.
Mally Anderson is Wordsmith and Editor-in-Chief of Cellarius, a blockchain-based transmedia
storytelling project at ConsenSys. She is also a cofounder of ConsenSys Research. She previ-
ously worked as an editor at Penguin Press and is a graduate of Vassar College.
Bobbi Thomason is the Head of Research at ConsenSys. She is on the faculty of the Wharton
School of the University of Pennsylvania and has worked as a researcher at Harvard Business
School and Harvard Kennedy School.
2018 © Joseph Lubin, Mally Anderson, Bobbi Thomason
innovations / volume 12, number 1/2
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Joseph Lubin, Mally Anderson, and Bobbi Thomason
unintended consequences, and then build
new technologies.
Scholars have concluded from such
studies that technologies cannot guaran-
tee a definitive impact, even when they
are built with specific intentions. This
matters because it offers space to inquire
into how individuals, organizations, and
societies interact with technologies, and
with each other. In the context of global
development, this means that, in order for
new technologies to empower all citizens
instead of perpetuating global hierarchies
and historical concentrations of power,
we must be vigilant about how and where
they are implemented.
We are in a particularly critical
moment for considering these questions.
Blockchain technology is less than a
decade old: Satoshi Nakamoto released
the Bitcoin white paper in 2008, and
Vitalik Buterin published the Ethereum
white paper in 2013. The development of
blockchain software protocols and appli-
cations that enable their decentralization
is still very much in progress. Blockchain
in 2018 is entering a critical selection
phase, in which it may evolve from a
fringe technology used by a small group
of enthusiasts trading cryptocurrencies
into a truly public and global platform.
Social dynamics shape the adoption,
implementation, use, and meaning of a
technology during the so-called selection
phase, which is the early period of ecosys-
tem development in which ever greater
numbers of users adopt a new technolo-
gy.1. The conventions, habits, and struc-
tures that emerge during this selection
period for blockchain are likely to deter-
mine its future success as a social tool for
facilitating decentralization.
The social construction of a new tech-
nology often begins with enterprise proj-
ects developing and testing a tool.
Gaining traction around
innovation
requires funding, and this dynamic can be
useful in accelerating development and
gathering critical resources early on,
which has proven true in the first few
years of Ethereum’s development.
However, it also means that the assump-
tions guiding these initial projects can
solidify into assumptions about the entire
ecosystem. This can be a drawback, as the
problems an enterprise is trying to solve
are very different from those faced by vul-
nerable populations, where access and
inclusion usually are far from guaranteed,
information asymmetry is rampant, and
power dynamics are uneven, although
there may be some common elements in
the solutions.
The challenge of the digital divide—
the differential access and ability of indi-
viduals, communities, and countries to
use information and communications
technologies and the socioeconomic and
political inequalities that result—is partic-
ularly urgent during the selection period
of a new technology. Failing to address
these imbalances early on can exacerbate
an already wide gap. The success of the
blockchain ecosystem and being able to
deliver on the promise of decentralization
is as much a question of inclusion as one
of effective protocol development and
usability.
THE POTENTIAL OF SMART
CONTRACTS
Many great minds and high-impact
organizations around the globe already
recognize the potential of the Ethereum
blockchain and decentralization
to
increase access, streamline processes, and
enfranchise global citizens. Much of the
attention in the ecosystem’s early days has
focused on financial inclusion, or “bank-
ing the unbanked,” which refers to the at
least two billion of the world’s population
who do not have access to the traditional
financial system. The thinking is that,
with accessible, secure digital identities,
lower transaction costs, and cheaper
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Blockchain for Global Development
remittances, the barrier to entry around
global financial networks will be lower
and more people will be able to partici-
pate.
While this could prove true in the
longer term, we argue that this is the
wrong emphasis in the early stages of the
ecosystem. Building so-called solutions in
traditional financial centers and expecting
marginalized populations to embrace
them wholesale oversimplifies the social
technological adoption.
process of
Moreover, it would require significant
disruption of a vast, old, and entrenched
system. There are other blockchain-based
solutions that can address a broader range
of pressing international development
issues in a local context.
These solutions must strive to avoid
repeating what William Easterly has
called the problem of “authoritarian
paternalism,” wherein the donor commu-
nity—usually composed of wealthy peo-
ple from so-called developed nations—
decides what is best for poor or disenfran-
chised citizens
in the “developing”
world.2. These efforts often are based on
distorted assumptions of what those vul-
nerable populations really need, or they
focus on increasing access to institutions
important in the developed world, such as
banks or deeded property records, in
regions that are operating outside of
Western economies.
From a financial inclusion perspec-
tive, the buy-in nature of most cryptocur-
rency-backed blockchain applications
assumes that under-resourced localities
define “value” in the same way western-
ized communities do—via fiat currency—
rather than by other quality-of-life meas-
ures like access to resources, social capital,
or the direct exchange of goods. Easier
access to credit or lower cross-border
transaction
fees are often degrees
removed from the daily concerns of
someone living on less than $10 per day— which is true of 80 percent of the world community.3. Whereas the Bitcoin blockchain emphasizes value exchange, the Ethereum blockchain introduced the mechanism of a smart contract, which enables trusted transactions, automated trust and agree- ments, and software objects to be shared and used on the decentralized World Wide Web. Smart contracts are essential- ly code that can process information and self-execute actions based on established rules and conditions, thereby carrying out agreements automatically. In many cases, this tremendously versatile mechanism removes or reduces the need for interme- diaries or third-party actions or attesta- tions, reduces transaction time and cost, and enables the automation of a broad range of tasks on a global scale. Blockchain technology has the poten- tial to increase productivity, efficiency, transparency, and disintermediation in peer-to-peer value or information exchange. All of these characteristics also create challenges for legacy organizations that are carrying out global humanitarian efforts and economic development, thus the potential benefits are manifold. In order for international development to be more than merely a top-down process— which inevitably creates opportunities for the abuse of centralized power—it is cru- cial to involve beneficiaries in the devel- opment of the technologies designed to empower and enfranchise them. In the current value chain of interna- tional development, funds travel across borders from a global network of donors or lenders to a system of implementation partners and local organizations. This economic circuit is opaque, inefficient, and slow, and much potential value is consumed before it reaches the intended beneficiaries. Blockchain technology is potentially a high-precision tool for understanding and instrumenting social economics. It can help the donor commu- nity track and monitor funds through the innovations / volume 12, number 1/2 13 Downloaded from http://direct.mit.edu/itgg/article-pdf/12/1-2/10/705255/inov_a_00263.pdf by guest on 08 September 2023 Joseph Lubin, Mally Anderson, and Bobbi Thomason complex aid distribution system and cut out cross-border costs and intermediary fees in the process. A notable recent example is the (WFP) World Food Programme’s Ethereum experiment in the Azraq refugee camp in Jordan. By incorporating biometric registration data from the UN High Commissioner for Refugees, more than 100,000 people in the camp have bought groceries with a retina scan that verifies their entitlement voucher.4. The WFP records and accounts the associated payment on the blockchain, which slashes the cost of cross-border and intermediary fees to just 2 percent of their previous amounts. This streamlined system can free more funds to go straight to benefici- aries, which could eventually include all 500,000 Syrian refugees currently living in Jordanian camps. Creative application of immutable ledgers and smart contract mechanisms has the potential to solve such issues as local corruption—for example, in the Niger River Delta, where funds intended for cleaning up severe oil spills are rerout- ed by militants and local government offi- cials—or to create networks of multiparty transparency in nonfinancial peer-to-peer value Constructing blockchain architectures that build a micro-economy of services that is mutu- ally tethered to incentives (and disincen- tives) is a more effective and sustainable means of empowering impoverished communities. exchanges. A common claim about the potential of blockchain to facilitate decentralization is that influence can potentially move from the center—governments, large hierarchical organizations and compa- nies—to the edges. In international devel- opment, this could manifest as two-way accountability in aid distribution and the genuine empowerment of vulnerable communities. Upward accountability exists in the form of reporting on funds and assis- tance; recipients of aid are accountable to the groups that provide it. For example, if a local NGO receives funding from USAID, it is required to report on how the funds are used and to demonstrate their impact. Blockchain technology can benefit both parties by enabling more transparent tracking of funds and their effective deployment on the ground. Downward accountability, or fun- ders’ and NGOs’ accountability to the populations they are working to serve, has been more difficult to implement. It is not easy to gauge reliably how effectively a group’s efforts are meeting the needs of local populations and integrating them into new iterations of their solutions. With simplereporting or surveying on a decentralized application, perhaps on a readily available mobile phone, the work of collecting trustworthy feedback could happen on the ground without requiring field staff to facilitate it, thereby avoiding potential corrupted or fabricated report- ing. A recent example is the distribution of funds to educate Syrian children, 1.6 million of whom have been displaced since 2011.5. The countries hosting the largest number of school-aged Syrians— Turkey, Lebanon, and Jordan—have received more than $1.4 billion in aid
funds to support their education, yet at
least half a million children have not
received any education, due in part to
local policies that exacerbate poverty and
increase social pressure to choose work or
marriage over education. Better reporting
on the distribution of funds, more sup-
portive policies for refugee families, and
better coordination between aid organiza-
tions would vastly improve the situation
Incorporating
for Syrian children.
blockchain technology could begin to
make this possible.
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Blockchain for Global Development
THE POSSIBILITY OF SELF-
SOVEREIGN IDENTITY
Although financial solutions are a readily
available advantage of Ethereum block-
chain applications, the nature of a decen-
tralized database and immutable ledger
offers still greater benefits in enfranchising
individual citizens. Another application
central to the vision of blockchain technol-
ogy and the possibility of a decentralized
world is the proliferation of self-sovereign
identity. The term “self-sovereign” has
recently entered the lexicon to describe
some identity systems, usually blockchain-
based. It does not connote a personal bub-
ble of idiosyncratic laws, though perhaps in
time the world may move to more granular
sovereignty. Rather it represents what many
believe is the right that all individuals on the
planet should have to own and control their
own personally identifying data. A self-sov-
ereign identity is a persistent, portable digi-
tal identity that is under the control of the
owner, with various aspects encrypted and
selectively disclosable by the owner in situa-
tions she designates. “Official” identities
currently are managed by the state; relevant
data is stored, and in effect controlled by, a
government body. Individuals in unstable
or hostile states thus risk losing their identi-
ty if they cross borders, flee their homeland,
or lose their ability to access funds or set up
new accounts. (Less formal, but equally
important, aspects of many of our identities
are controlled by corporations that store
and monetize this personal information,
often without adequately securing its stor-
age.)
The International Labor Organization
estimates that at least 21 million people are
affected by human trafficking, most com-
monly in the form of sex slavery or forced
labor.6. More than 26 percent of those peo-
ple are children. Having a self-sovereign
identity could make it possible for individu-
als caught in human trafficking to flee with-
out depending on a passport or other form
of identification that otherwise could be
withheld or stolen from them.
However, no technology has inherent
social power, only potential social utility. A
new technology acquires meaning from the
ways people use and adopt it; thus, to
become a solution, an adopted technology
needs to be coupled with informed and
proactive policy. For example, introducing
self-sovereign identity on the blockchain to
a vulnerable population living under a cor-
rupt government does not suddenly solve
the problem of human trafficking. In fact, in
such cases technology can become a
weapon to use against the very people it is
intended to help.
A current example is the problem of
sex trafficking in Moldova, a country known
for a high level of kidnappings and forced
labor, particularly in the breakaway region
of Transnistria.7. Depressed economic con-
ditions and a lack of local opportunity—the
average monthly salary is just $230—force
many Moldovans, including many women
and children as young as 13, to migrate else-
where, often in response to fake online job
postings. People from rural areas are at a
particularly high risk for kidnapping
because they often do not have state-issued
identification, which makes it easier for
traffickers to move them across borders
using fake documents, rendering them all
but invisible to border authorities when
they go missing.
While a self-sovereign, immutable dig-
ital identity for Moldovans might seem like
a workable fix, well-established criminal
networks that cooperate with corrupt offi-
cials will likely find a way around enforce-
ment steps, like checkpoint verification. In
an already unstable political environment,
workarounds, bribes, and further abuses of
power could easily undermine a more
secure identity system and place vulnerable
Moldovan citizens
in greater danger.
Technology alone is not a life raft; to uphold
solutions it requires buy-in and participa-
tion from government and non-govern-
ment organizations alike, as well as the
implementation of supportive policy. Self-
sovereign identity is a potentially powerful
tool for vulnerable populations across the
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Joseph Lubin, Mally Anderson, and Bobbi Thomason
world, but the social structures surrounding
identity must be in place for that potential
to be realized.
THE PROMISE OF
CONSUMER UTILITY
TOKENS AND WORK-IN
ECONOMIES
Another blockchain-enabled solution
could give local social networks greater
agency and incentive feedback loops,
thereby empowering marginalized com-
munities to develop their own tools for
change. A token is a digital asset that
either has its own inherent value or repre-
sents some other asset on the blockchain.
Using a crypto-economic incentive mech-
anism, tokens can promote the emer-
gence of new, distributed digital networks
of mutually incentivized participants and
help them coordinate their efforts to
achieve a common goal. Consumer utility
tokens are often services or units of serv-
ice that can be used to gain access to serv-
ices provided via a decentralized applica-
tion (i.e., a digital subscription or mem-
bership sold in exchange for access and
reduced fees). Utility tokens can also
serve as claims on content, like a song, or
scarce resources, like decentralized data
storage, for instance. Consumer utility
tokens are distinguished from investor
tokens, in that securities bodies around
the world would not consider them to be
subject to the strictures of securities law.
Consumer utility tokens on the
blockchain can provide a mechanism for
economically incentivizing social good.
With the ability to create “programma-
ble” economic incentives, a development
target or milestone can be built into the
feedback loop of the token as a functional
component of its design. A token can
reestablish economic
incentives that
enhance quality of life for the members of
its user network. The token is a means of
“keeping score” between the services
being exchanged, wherein a voting system
lets users rate one another’s work. This
could be as simple as letting community
members vote on which tasks or services
are most in demand in their local net-
work.8.
Other token-related tools, such as
token-curated registries (TCRs), can also
facilitate peer-to-peer management of
mechanisms for mutually improving
quality of life and local economic condi-
tions. A TCR is a system in which users
apply to a list vetted by a group of token-
holders that upholds a set of criteria. The
list is designed to incentivize its own
maintenance by its curators so that it con-
tinues to evolve in a valuable way. A TCR
could include a list of services needed in a
particular social group or microeconomy,
or a ranking of services performed or
exchanged. Management and implemen-
tation are in the hands of the participants,
and the potentially quick feedback loops
can boost a microeconomy or effect social
change much more swiftly than any exist-
ing top-down methods.
Given the challenges of downward
accountability and transparency across
global development efforts, tokens are a
potentially powerful way to include bene-
ficiaries in aid programming efforts, or
even to empower them to control new
means of coordination among them-
selves.
LOOKING AHEAD
The tools described in brief in this essay—
smart contracts, self-sovereign identifica-
tion, utility tokens, and TCRs—are avail-
able now. While it may take years to
understand the impact of the Ethereum
blockchain across institutions, the possi-
bility for broader social change begins
with the solutions developed during the
selection phase.
Whether we will succeed in building
a decentralized future together depends
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Blockchain for Global Development
opment/2018/feb/06/unicef-recruits-gamers-
mine-ethereum-aid-syrian-children.
6. “Global Estimates of Modern Slavery.”
Available at http://www.alliance87.org/glob-
a l _ e s t i m a t e s _ o f _ m o d e r n _ s l a v e r y –
forced_labour_and_forced_marriage-execu-
tive_summary.pdf.
7. ConsenSys is currently working on a proj-
ect with the World Identity Network to
explore blockchain-enabled identity solutions
in Moldova. For more information on this
engagement, visit
https://www.econotimes.com/World-
Identity-Network-ConsenSys-partner-to-
build-blockchain-solution-to-fight-child-traf-
ficking-1203648.
8. Greenfield IV, Robert. “Developing Work-
In, Not Buy-In Token Economies.” Brooklyn,
NY: ConsenSys Media, January 2018.
Available at
https://media.consensys.net/developing-
micro-economies-via-work-in-not-buy-in-
9f15b28f4126.
on early efforts to make Ethereum-sup-
ported technologies accessible, inclusive,
and tailored to local social contexts.
Observers and participants alike should
hold one another accountable to these
goals in a spirit of productive coordina-
tion and shared responsibility. In global
development, as in many other fields, the
potentially transformative power of these
tools is great, but only if they are con-
structed to function in the world as it is
now, in all its entrenched and challenging
complexity, as well as to facilitate the
transition to a more equitable world.
1. Leonardi, Paul M., and Stephen R. Barley.
“What’s under Construction Here? Social
Action, Materiality,
in
Constructivist Studies of Technology and
Organizing.” The Academy of Management
Annals 4, no. 1, 1-51.
Power
and
2. Easterly, William. The White Man’s Burden:
Why the West’s Efforts to Aid the Rest Have
Done So Much Ill and So Little Good. New
York: Penguin Press, 2006.
3. Ravallion, Martin, Shaohua Chen, and Prem
Sangraula.
“Dollar a Day Revisited.”
Washington, DC: World Bank, May 2018.
4. “Blockchain Against Hunger: Harnessing
Technology in Support of Syrian Refugees.”
Available at https://www.wfp.org/news/news-
release/blockchain-against-hunger-harness-
ing-technology-support-syrian-refugees;
Tirone, Jonathan. “Banks Replaced with
Blockchain
Food
Programme.” Bloomberg, 2018. Available at
https://www.bloomberg.com/news/articles/20
18-02-16/banks-replaced-with-blockchain-at-
international-food-program.
International
at
5. Human Rights Watch. “Following the
Money: Lack of Transparency in Donor
Funding for Syrian Refugee Education,”
2017. Available at
https://www.hrw.org/report/2017/09/14/fol-
lowing-money/lack-transparency-donor-
funding-syrian-refugee-education. UNICEF
has undertaken another new project as of
February 2018. More information available at
https://www.theguardian.com/global-devel-
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